Contributed by Datuk Paul Khong of Savills Malaysia
Many countries have customised policies to allow Airbnb to operate but seek to control and regulate its operations in some form
Airbnb is one of the few successful tech unicorns in the worldwide hospitality industry which has caused severe market disruptions, as with Grab and Uber in the transportation world, due to their innovative platforms.
Malaysia is likely to accept Airbnb and short term rentals, given the existing widespread support from users, especially in the government’s efforts to promote “Visit Malaysia 2020”. However, regulations for the tech unicorns are underway and it is likely that Malaysia will see some form of increased regulations in place soon.
Short term tenancies are getting popular and owners are looking at such arrangements especially if the property is well located – possibly near the city centre, a holiday destination, or a specific development.
Previously, this area used to be rubber land, but it was turned into a recreation, dining and homestay experience after guests remarked that from the hilltop, one could see neighbouring peaks and landmarks such as Gunung Ledang (Mt Ophir) and Gunung Maokil to the north and west, and to the northeast, the Endau-Rompin National Park.
From a commercial perspective, returns are quite attractive – however, in the perspectives of other owner-occupiers, they prefer to keep the commercial elements such as Airbnb out of their developments due to the various problems encountered.
This leasing angle is not addressed by the strata title or via the National Land Code and many JMCs are looking at the law to address and control this matter.
Many well-located projects, such as Imago KK, Afinity Medini, and St Mary’s Residences among others, are highly sought after. Returns on short stays can potentially be even higher during busy months when compared with a typical yearly tenancy.
Due to the introduction of Airbnb, many landlords are becoming small-time serviced apartment operators and running such operations is slowly becoming a full-time vocation.
Ahmad Hamzah (left) and Ch'ng Kim Teck with a folder of rules and regulations for guests in the house built in 1934 in George Town rented out for RM600 a night by home-sharing operator S.H. Tang. Star pic by: CHAN BOON KAI/ The Star/ (29th June 2016)
As of February 2019, the Malaysia Tourism Industry Act 1992 (amended) requires registration of all property owners offering short term stays to obtain proper business licenses.
In Sabah, as of 16th October 2017, Kota Kinabalu City Hall confirmed that it was illegal for residents to lease their properties through Airbnb in the state.
We note that this position is taken by one local authority and may not be applicable to all others who may have differing views within their respective jurisdictions. However, no existing federal legislation currently regulates Airbnb.
Whilst the main argument for by strata property owners are their rights to lease their properties, the argument against is that all owners are entitled to the peaceful enjoyment of their homes with safety, privacy, and security within their project.
A giant banner showing that the "Residents Say NO to Homestay/ Short Stay Here" hanging at The Peak Residences at Persiaran Halia 3 (Penang Island) on 26th June 2016. Star pic by: CHAN BOON KAI/ The Star
With high-rise strata living becoming a norm, there must be a balance here to allow mutual coexistence between property owners with minimal disruption.
About the contributor
Datuk Paul Khong is the managing director of Savills (Malaysia) Sdn Bhd.
Savills is a global real estate services provider listed in the London Stock Exchange with more than 600 offices and associates in over 60 countries.
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